CAPM BDBL Mutual Fund-01 unitholders to vote on open-end conversion or redemption

The trustee of CAPM BDBL Mutual Fund-01 has called a special general meeting of its unitholders to consider converting the scheme from a closed-end to an open-end mutual fund, or proceeding with its redemption, according to a stock exchange filing.

The special meeting is scheduled for 7 October, and the record date for determining unitholders’ eligibility to attend and vote has been set for 15 September, the filing said yesterday on the stock exchange’s website.

In accordance with regulations, trading in the fund’s units across stock exchanges will be suspended starting on the record date.

The trustee, Investment Corporation of Bangladesh (ICB), has also informed that trading in the fund’s units on the stock exchanges shall remain suspended from the record date until further notice, or as otherwise communicated by the fund, the disclosure said.

The move comes under directives set out by the Bangladesh Securities and Exchange Commission (BSEC) governing closed-end mutual funds.

Under BSEC regulations, if a closed-end fund’s six-month average market price trades at a discount of more than 25% below its issue price or fair-value-based net asset value (NAV), or as it approaches maturity, the trustee is required to convene a special meeting to decide the fund’s future. 

To pass a conversion proposal from closed-end to open-end status, at least 75% of the voting unitholders must vote in favor of the resolution. 

Under amended BSEC rules, closed-end mutual funds are prohibited from extending their operational tenure, leaving conversion to an open-end scheme or winding up (redemption) as the only permissible options upon maturity or regulatory triggers.

Trading remains suspended from the record date through the voting process to preserve unit ownership integrity.  If unitholders approve the conversion, conversion and meeting expenses are borne by the fund manager, if rejected, the fund proceeds toward liquidation or redemption, the rules said.